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Following Airbus deal, Bombardier picks up jet orders

Updated November 14, 2017 at 3:02 PM;Posted November 14, 2017 at 2:56 PM

Made in Alabama? A new partnership between Airbus and Bombardier could bring production of C Series jets such as this one to Mobile, where Airbus already assembles aircraft from its own A320 family. (Courtesy of Airbus)

Bombardier has picked up some new orders for its C Series jets, which some analysts see as a favorable response to a plan to build them in Alabama.

In early October, Airbus and Canadian company Bombardier announced a partnership in which Airbus will take a majority stake in the C Series Aircraft Limited Partnership (CSALP) and a new assembly line will be built in Mobile, leveraging Airbus' experience establishing a Final Assembly Line there for its own A320 family.

On Nov. 2, as Bombardier issued its third quarter financial report, which claimed that a European customer, which it did not name, had signed a Letter of Intent for the purchase of up to 61 C Series aircraft, including 31 "firm." Based on list price, the firm purchase of 31 jets would be a $2.4 billion deal. The company expects to deliver 20-22 C Series jets this year, an output impacted by engine delivery delays from Pratt & Whitney.

The C Series is a new program and the numbers aren't huge. As of Sept. 30, Bombardier had taken 360 total orders for CS100s and CS300s, and delivered just 19. By contrast, Airbus figures released in October show that it has received orders for more than 13,000 A320-family jets and delivered nearly 8,000.

But because the C Series jets are so new, every order counts as a vote of confidence in its future. A Bloomberg report said the EgyptAir buy was "especially significant for Bombardier, which gains another customer for its new jet less than a month after the company agreed to cede control of the C Series to Airbus in exchange for the European planemaker's marketing heft and manufacturing expertise."

The Bloomberg story suggests that Airbus bought into a struggling but promising program: "The C Series was two-and-a-half years late and more than $2 billion over budget when it entered service at Deutsche Lufthansa AG's Swiss International unit in July 2016. Swiss and Air Baltic Corp., which began flying the CS300 in December, have reported better-than-expected fuel efficiency, which is key to the jet's appeal."

According to the Financial Times, EgyptAir Chairman Safwat Musallam said Airbus' new stake in CSALP hadn't provided motivation for the purchase plan. EgyptAir had thoroughly evaluated the CS300, he said, and "We were going to buy it anyway."

The Airbus-Bombardier partnership hasn't received regulatory approval yet. Bombardier recently filed documentation suggesting that the proposed assembly line in Mobile would create 400 to 500 direct jobs and other economic boons.